A bill that would have regulated and taxed hundreds of slot machines in bars and truck stops throughout Wyoming has died in committee. That leaves the growing number of machines in a state of Wild West freedom, much like Wyoming itself. It’s an age-old issue of free range versus “fences” and order.
However, some in the state had suspicions that a mysterious group lobbied lawmakers into allowing the bill to wither away. Possibly in contravention of state lobbying laws.
Digging by local journalists eventually uncovered that the mysterious Wyoming Public Policy Center was funded by a local tribe, the Northern Arapaho tribe, owners of the Wind River Hotel and Casino. This resulted in the tribe’s longtime attorney and the CEO of the casino being fired when their roles were uncovered and publicized.
Before that happened, however, the Joint Committee on Travel, Recreation and Cultural Resources did not vote a bill out that would have created a commission to oversee and regulate some forms of gaming. It was the latest of several efforts over recent years to get a handle on the machines. During the winter an effort to create a gaming commission was stillborn.
The Star-Tribune has reported that about 400 gaming machines operate without regulation, generating an estimated $4 million in revenue that could be taxed from this state with a population of about 572,000. The number of machines is growing steadily.
There is little support among lawmakers to do anything next year either since that is a budget session when little actually lawmaking anticipated. Senator Ogden Driskill, who is chairman of the Travel committee, told the Star-Tribune, “My prediction is we’re going to come back next year with nothing passed, and we’re going to be dealing with something between 800 and 1,200 machines.” He added, “It’s getting harder and harder to slow that down.”
Driskill continued, “Committee bills are the easiest route to go, and I think it’s going to be a hard sell.”
Many in the industry favor self-regulation, rather than a commission. Katherine Wilkinson, who represents Wyoming Skills LLC, a coalition of gaming operators, said, “We do not feel like a gaming commission is a necessary step to regulate our industry. We do feel it is an unfair advantage to the existing industries that are already regulated as the rule is written.”
She points out that her group has hired a compliance officer to ensure that businesses the members contract with follow the law and to report those who do not.
The state also has Indian casinos, including Wind River Hotel and Casino, Little Wind Casino and the Shoshone Rose Casino and Hotel.
Meanwhile, the Wyoming Public Policy Center used $80,500 from a tribe to employ a mix of well-known lobbyists and unsigned white papers. It only registered with the Secretary of State’s Office after the Star-Tribune began an inquiry. It faced few repercussions for failing to do so because, like gaming itself, there is no overarching authority for enforcing the lobbying laws.
In the last 12 months the Wyoming Attorney General’s office has begun inquiries into illegal gaming machines. Some of this was inspired by frustrations within the industry itself.
Senator Driskill points to nearby South Dakota, where gaming is regulated, as a warning. Machines proliferate in nearly every available venue, including gas stations and bars. He fears the same for Wyoming.
It’s not as though the state doesn’t have laws regulating gambling. But it has no implementing regulations or regulator to enforce them. Horse racing operates by its own rules as do the lottery and slots.
It is easier for local officials to turn a blind eye to obvious illegal activities than to grasp the nettle. The police are uncertain of their role in this situation.
The state has a practical reason for wanting to put regulation under one tent: revenue. It has agencies that could provide the framework, including the Wyoming Lottery and Pari-Mutuel Commission, but they are not authorized by the legislature to take on that job.
The mayor of Cheyenne, Marianne Orr, would like to have local control over the gaming, and to use the revenue that might accrue for a development tool. She would like to confine gaming to the city’s historic downtown to draw tourism there. She told the Star-Tribune, “I do believe statewide regulation is important, but I do believe in local control. What’s good for my community may not be good for other communities.”
Although the Star-Tribune first outed the activities of the Wyoming Public Policy Center, which ignored requests for information or comments. Its website defended its anonymity by saying that it was funded by “a group of private Wyoming citizens who were concerned about the growth of state government” and chose to stay anonymous “due to the extremely charged nature of today’s political environment.”
It was a newspaper called the Laramie Boomerang that discovered that the Northern Arapaho Tribe was the sole backer of the group through examining filings with the Secretary of State’s office that showed that the Wind River Casino donated $80,500. The filing listed the co-chairman of the Northern Arapaho Business Council as an “association representative” to the Center.
The rest of the members of that council say the tribe’s attorney, Mark Howell, with the knowledge of the CEO of Wind River Casino, Jim Conrad, created the organization without authorization. Howell says he briefed them several times about the lobbying campaign. Nevertheless he was fired several days after the tribe’s participation came to light.
The tribe’s representative in Washington D.C., Keith Harper, told the Star-Tribune that the Public Policy Center was created by Howell without the knowledge of the tribe and its chairman, Lee Spoonhunter.
Harper said, “This comes as an utter shock to the tribe and the business council,” Harper said. “They were completely unaware of the actions Mr. Howell was taking in forming this entity. He did it behind their backs with the CEO of the casino (Jim Conrad) — who has also been terminated. These are actions that lack in transparency that the tribe believes is essential. The governing body of the tribes are appalled by these actions.”
Later the tribe contacted the Star-Tribune to claim that the majority of the council did not know about the Public Policy Center, except for Northern Arapaho Business Council Co-Chairman Al Addison and Councilman Sam Dresser.
According to the statement: “Upon learning of this, the Council took immediate action to terminate Mr. Howell’s contract with the tribe,” It added, “We are currently conducting an internal review to determine the extent of the transgressions of Mr. Howell and anyone else who may have been involved.”
The statement added, “We’ve notified the National Indian Gaming Commission of this matter, and we will fully cooperate with all regulators and proper authorities to ensure the long term protection and success of the Northern Arapaho Tribe.”
Howell denies this. He called the Star-Tribune to claim that the tribal leaders ordered him to do “whatever it takes” to defeat gaming regulations. He said the leader knew what he was doing and that Chairman Lee Spoonhunter met with him last winter and approved the website for the Wyoming Public Policy Center and the ad campaign.
The Center originally filed late last year as an LLC based in New Mexico, a state that allows anonymous LLCs. Several months later it filed as a foreign LLC in Wyoming. It also registered its domain name through an anonymous proxy service. It hired a lobbyist registered with the Wyoming Secretary of State’s Office in January and ended the relationship at the end of the legislative session.
Addison and Dresser support Howell’s assertions and told the newspaper, “Chairman Spoonhunter was especially forceful in his instruction to Mr. Howell to oppose legislation legalizing Vegas style slot machines off reservation.”
Before the true funding for the Center was discovered, the nature of how it was created made it impossible to prove or disprove its pledge to eschew corporate funding. Or to find out anything at all about who was paying for its lobbying efforts. State law requires lobbyists to register; it does not require those who hire them to register.
Although the name Wyoming Public Policy Center implied a wide range of policy interests, the organization seemed to have one job: to oppose gaming regulation bills.
During the active legislative session the organization was active in posting calls to action or to listen to livestreams of meetings—and probably most key: to contact specific lawmakers to talk against the various regulatory bills. Typical white papers it issued were entitled “The True Impact of Video Slot Machines in Wyoming,” and “The True Cost of Regulating Statewide Gambling.” The video slot machines it refers are the machines not operated by tribal casinos.
But it was the true cost of regulating tribal gaming that was the concern of the casino and Chairman Spoonhunter.
Last year before the legislative session began, the former casino CEO, Conrad, calculated that if some gaming regulations were adopted, the casino would lose as much as $14 million each year on the 851 slots it has.
Last year the tribe’s three casinos, led by its flagship Wind River Hotel & Casino, earned $36 million in revenues. The tribe is in a unique position as the only gaming tribe to operate in the U.S. without a tribal state gaming compact. Therefore it shares no revenues with the state. About 85 percent of the casinos’ revenue comes from slot machines.
One of the bills that the Wyoming Public Policy Center focused on would have legalized a type of slot machines called “video skill games.” These machines are the kind that Senator Ogden Driskill says need to be brought under state control. Former state Attorney General Peter Michael in December issued an opinion calling them “illegal slot machines,” but this opinion has apparently led to few being actually being shut down. If they were to be legalized that would remove the tribes’ monopoly on slot machines.
Howell asserts, “It would have meant major job reductions, and there would be no ability to provide for social services programs for the tribe from the casino. The council was informed of all this, and that’s when they authorized everything.”
He claims the tribe pursued a secret, anonymous campaign because it felt that legislature wouldn’t take its concerns seriously and they would be treated as a special interest.
Harper in Washington D.C. says tribal members were kept in the dark about the Center and its funding and that Conrad operated secretively, refusing to provide financial information to the business council. This is one reason his contract wasn’t renewed, says Harper.
He says the new reform council elected last year felt that Conrad and Howell were not representing the tribe’s best interests. Harper declared, “These were the two individuals wholly responsible for forming this entity, for hatching this plan, and for implementing it. And they utilized the resources of the casino in order to do this, without prior approval from the business council.” He promised an investigation.
The former tribal attorney says he would welcome an investigation, which he claims will vindicate him. “I am prepared to fully cooperate with any federal investigators,” Howell said. “I will assure anyone who says the business council did not authorize this will be in violation of criminal conduct under the U.S. code. They will be lying to a federal investigator. They can lie to you, but they can’t lie to federal investigators. That’s when it’s going to come out.”
Howell told the Boomerang, “Both the former members of the Northern Arapaho Business Council and Keith Harper are lying and it’s provable.” He added, “They can lie to reporters, but they can’t lie to FBI or the Indian Gaming Commission because that’s a crime. I too will cooperate with any federal investigation on this matter.”
